Slew of TM scholarship in last decade has criticized law’s
breadth and expansion by demonstrating that current law targets behavior that
is simply not harmful.Dogan &
Lemley, Tushnet, etc.—what courts are treating as harm isn’t really harm.But the more she thinks about it, the more
she realizes that the harm narrative simply doesn’t work as a comprehensive
description of TM law in the US, and hasn’t for a long time.Courts turn to the trope of harm, and
contrast it w/patent and copyright, but many features of system make no sense
in a law that aims primarily to prevent injury either to producers or
consumers. Not a utilitarian view that preventing misinformation is the best
way to promote competition. Instead, a moral sense that TM owners and not some
third party deserve the results of their labor, absent some justification.Unfair to profit from deliberate use of
someone’s protected mark, unless exception is shown. Benefits-capturing rather
than harms-preventing approach. Courts/Congress are sometimes explict but other
times turn to pretext about harm.

Post-sale confusion and counterfeiting: quite explicitly
finds any confusion among anyone sufficient, even if confused person would have
no purchase interest; case law is explicitly benefits-capturing.Dilution law as applied also has a
benefits-capturing approach. The statutory preamble discusses harm, but the
factors listed are all focused on evocation.Merchandising/confusion as to association/confusion in unrelated
markets.Initial interest
confusion.Courts just don’t like
someone making money from evoking a TM.

All of these doctrines involve deliberate use of mark.And,
to the extent it’s found to infringe or dilute, the conduct is seen as lacking
in social value. Deliberate free riding: instinctive sense of unfairness.
Absent justification, courts distrust attempts to benefit commercially from use
of someone else’s mark. Even in early TM opinions, see courts troubled by uses
w/no explanation or justification but to take advantage of another’s
reputation. Decisions that refused to enjoin such conduct even in early days
tended to involve cases where there was reason to worry about enforcement.E.g., use of a geographic term—might be some
confusion, but also important to preserve term for others to use truthfully.
This is a justification.Showing either
your specific use or this type of use generally deserves recognition.

In today’s benefits-capturing TM world, the action is in
demonstrating the social value of unauthorized use.At least where a party is deliberately using
another’s mark for commercial reasons, party has a soft burden to show that its
use/type of use is worth preserving.Courts do shape the doctrine to respond to those concerns.Other values courts have responded to.Call to action: instead of waving our hands
about absence of injury, we should think about what kinds of uses of marks have
social value and begin demonstrating the social value of uses we think
shouldn’t be prohibited.E.g., study
showing that elderly people comply better w/drug regimens when they have the
same shape/color drug over time.

RT: Is evoking benefits anything other than good/inevitable
litigation strategy?Compare §230
rhetoric or even a classic criminal defense.The harm/benefit distinction has been challenged by realists.Playing that out here, it may just be
standard for defendants who are protected even by a harm rule to remind
courts/courts to remind readers of the reasons for that rule--§230 couldn’t be
more explicit that it sacrifices the interests of some people who are indeed
harmed to the greater service of protecting “the internet,” and courts and
defendants nonetheless remind us all the time of the good purposes Congress
had.First Amendment implications: free
riding alone may not justify speech regulation, per Alvarez.I also caution
against the (very common; I’m sure I’ve done it myself) use of the idea of an “instinctive”
sense of unfairness. Did it seem unfair when your kid learned words from you or
learned to write?Unfairness is socially
constructed.(That we are hardwired to
find some things unfair is plausible to me.But not which things, at least in this context.)

Dogan: courts are making fairness determinations within
things like dilution—sex exceptionalism in what counts as dilution. Agrees that “unfairness” is socially
constructed and evolves over time; some chicken and egg in terms of legal
standards driving what counts as unfair versus changes in nature of brands over
the course of 20th century not driven by the law.

Lisa Ramsey: First Amendment analysis may support your call
for greater use of empirical evidence, looking for evidence of real
harm/support of narrow tailoring.

Dogan: is a pragmatist/instrumentalist.We can move incrementally.If we successfully demonstrate social value
in a handful of cases, over time we can generalize.

Fair Music and False Advertising

Yan Fang

Topic: Advertising that makes claims about how musicians are
compensated by companies.Sellers
compete at least partially on how well they compensate musicians. CD Baby
purports to offer the most “organic, free-range, grass-fed” music in the
world.Lion’s share goes to
artists.Magnatune makes similar claims:
50% goes straight to musicians, not to lawyers or labels.Bandcamp makes aggregate claims about how
much musicians have made through the site.Artist compensation claims; practice contrast claims; moral positioning
claims—each relating to consumer concerns about artist treatment.

Artist compensation: claims about amount or percentage of
sales that go to musicians; aggregate revenue claims.Practice contrast claims tend to be more
general, comparing to general music industry practices—more revenue than
through online retailers.Moral
positioning: even more general, and encourage consumers to see buying music
through these sites as part of a moral stance towards artist compensation. Do
good with your consumption!

This is an example of process advertising, recognized in
other areas like fair trade chocolate, cruelty-free makeup.Long and complex production chain for music,
like other goods; hard for consumers to verify these claims.Gov’t agencies and private parties may police
these claims under federal and state laws.

Artist compensation claims are fact-based, not
opinion/puffery.Concrete basis for
comparing how various online stores pay musicians.Auditing could glean the truth.Consumers are suspicious about unverifiable
claims and want to buy from sources that do treat artists well.Next part of project: there are always issues
of whether consumers have cognitive limitations in evaluating process
claims.Spotify has started making fair
music claims; advertise how much they’ve paid in royalties, but contractually
barred from disclosing percentages/allocations.

Eric Goldman: claims about artists, musicians, labels: there
is a difference between paying a label and paying the musician. How does that
affect claims?

A: still refining that, but one of the problems w/these
types of claims is how you do define the participants.(RT: Indeed, that seems to be the problem
with Spotify’s advertising—disclosing how much they paid in royalties is
misleading about how much artists get.)Maybe need clearer explanations of full chain of payment. CD Baby and
Bandcamp tend to be companies that have music aggregator business with lots of
artists signed up.

Q: Number claims are great for consumers, and easy for FTC
etc. to go after.What about the other
two?Are they problematic? They seem
associational/tongue in cheek.

A: most actionable, but the other claims are more
encouraging consumers to care more about these issues—telling consumers why
they’d choose to buy from this seller.

Q: 50% of nothing is nothing—micropayments.Spotify/streaming is almost nonexistent for
some independent artists.50% might
oversimplify in a way that is important.Can advertising law reach that?

A: there have been some fair trade certification projects
launched in the music space—music venues; standards for what would constitute
fair music.Whether it’s misleading is
an important question.

RT: (1) Is there reason to think there is a false or
misleading advertising problem in this market? (2) What generalizable
conclusions?Encourage writing that next
part and making it part of this paper.If process claims are available, and relevant to consumers, in many more
contexts than previously realized, among other things that has implications for
the First Amendment treatment of advertising regulation—compare the claims made
in the Nike v. Kasky dissent in the California Supreme Court, or the dissent in
the recent DC Circuit country of origin labeling en banc opinion.

A: working through those issues & how preferences
develop and how advertising law ought to respond.RIAA’s negative publicity led to
boycott/anti-record label reactions.Now
that’s died down but there are more legal sites making fairness claims.

Trademark and the Problem of Agency Costs

James Gibson

Similar starting point from Dogan.Consumer protection/producer incentive to
develop repeat customers/economic efficiency are traditional TM
rationales.The core case on which
everyone tends to agree is fraud on the consumer. The consumer is not only
confused but also makes a purchasing decision she would not otherwise have
made.Confusion is just one of the
predicate occurrences required to reach core passing off TM case.But is fraud the right word?Gets at the notion of consumer injury.

Wants to double down on purist approach, not ready to be
pragmatist—try another approach to the harm issue. If we really think core TM
harm is fraud on the consumer, why do we give the producer the right to sue?
Interests must converge somehow, at least coincidentally.Whether that’s historically accurate or not,
he might not care whether we have always been at war with Eastasia; the fact of
the matter is that it’s the TM owner who litigates.That makes sense b/c individual consumers
don’t have enough incentives to sue and producer can aggregate fraud. Makes
producer an agent of the consumer.(Class action theory—why do we hate class actions so much but love TM
owners?TM owner is seen as having
respectable monetary motivations.)

Classic passing off case: not much agency cost; producer and
consumer interests converge, b/c consumer and producer are harmed by the same
conduct.Agency cost literature:
monitoring costs, bonding costs (how do you pay agent to do your business and
not its own?), and residual loss (sometimes the agent does its own thing
anyway).Not a problem for passing off,
but as one gets farther from that, the interests start to diverge.

Rights without fraud, and fraud without rights.Rights without fraud: TM owner wants to sue
but it’s difficult to show consumer fraud in first instance.We all know the litany: merchandising rights/sponsorship
or affiliation claims etc.Fraud without
rights: consumers arguably suffer deception and make different purchase
decisions, but producers can’t or don’t bring suit.Lots of examples in licensing—including
bankruptcy (e.g., Hostess’s Twinkie TM, which is valuable and thus is used to
pay off creditors, and some courts will accept that without caring that a new
producer will now make the Twinkies as long as the assignment says the right
words about goodwill; security interests). Also concurrent use through
settlement; abandonment through disuse.Laches.

Mark McKenna: Agents for which consumers? They aren’t an
undifferentiated mass. One difficulty w/some examples is that some consumers
may have problems, but solving them would create problems for other
consumers.Fraud without rights: one
basic challenge to thinking of TM owners on behalf of consumers—vindicating
what interest? There may be other consumer confusion not clearly within ambit
of TM law.Why not?Why does TM law have a boundary from
advertising law?

A: maybe agency analysis would help us sort out the types of
consumers.This is sort of an unfair
competition paper, about misinformation in the market generally, but theory
isn’t limited to consumer deception over marks.

Eric Goldman: This discussion has taken place in the false
advertising context. You should decide whether you are mirroring the false
advertising discussion or whether there is something special about TM—fraud w/o
rights might be an example.

RT: Other entities who specifically act as agents in the
sue/not sue decision. Class action comparison might be fruitful—there are a lot
of cases about what counts as harm to the class.Also perhaps copyright troll/NPE literature?TM law need not have a boundary from
advertising law!The basic principles
could be the same!Then
registration/ownership would just be their own issues.

Laura Heymann: What does it mean to be an agent in some
contexts but not others? Not acting as an agent when a TM owner changes its
formula/hires new employees/changes the mark.

Semantic Shift and Trademark Capacities/The Death of De
Facto Secondary Meaning

Jake Linford

Under the doctrine of TM capacity/de facto secondary
meaning, a term deemed generic due to its etymology/history can’t be a mark
even if consumers recognize it as such. Part of the theory is that this doesn’t
happen often. But literature about semantic shift—new meanings added to
words/old meanings lost—suggests otherwise.Prototypical category gets narrowed to single member—some people say
it’s the most common semantic shift, but at least it happens all the time. So
we need to rethink the idea that it’s not common.

Replace w/primary significance test—if consumers see it as
source signifier, treat it as such.

COMPUTER for computers: very hard to imagine a shift
happening right now in the modern economy where people see it as signifier for
one producer.But Babbage’s “analytical
engine” was a predecessor: at one point in time it was the only word we had for
the product now known as a computer. It must be the case that ANALYTICAL ENGINE
would be protectable for computers now, despite its etymology.

Hotels.com: Even w/evidence of secondary meaning, TTAB said
.com didn’t add anything for hotel services.Chocolate fudge soda.Kiss for
chocolate candy: etymology was that they were standard for tiny candy.But unpublished PTO opinion said 80%
recognition made it a mark.SINGER for
sewing machines had TM protection, lost it, then regained it.CODE for sealant?In 16th century, “code” meant
sealing wax, but nobody knows it now. Etymologically it shouldn’t be allowed
for sealants, except obviously it should.

Built in trust of incumbents in current doctrine—worry
they’ll distort consumer protection.TM
incapacity looks like functionality, but that’s wrong.Enforcement costs/risks of false
positives—given how often this happens, that’s probably wrong.Also, which groups of consumers do we care
about?Assumption has been that
consumers who understand the term as generic will be in a bind b/c they won’t
have access to new entrants.If that’s
right, then properly functioning TM significance survey should find them.One pushback: we shouldn’t trust survey
evidence.In that case, we’re just
living in a world of marketplace dominance. (??)

TM acquisition is simply a form of language change.It’s simply a way of processing how language
changes—Apple has meaning for computers when it didn’t for computers
before.Need to find new name is
important cause of semantic changes.Invent torpedo: need to explain what it is.Borrow name from manta ray!Occasional meanings put forward by any
speaker may change into usual meanings, or fail. (“Stop trying to make fetch
happen!”Or, for TM: stop trying to make
Bing happen!It’s not going to happen.)

Language changes to resolve ambiguity and handle semantic
overload. Sometimes by narrowing or changing meaning. Hound used to be any dog,
now it’s a species. Wife used to be woman of humble rank, now it’s married
woman.

All sorts of semantic shifts where Abercrombie spectrum matches up nicely to what we see in
linguistics. Outlier is de facto secondary meaning, and it shouldn’t continue
to exist.

If it’s correct that consumers see term as having source
significance we’re introducing error into the language when we call it generic.

David Welkowitz: more a process matter, not just distrust of
surveys:worry about consumer surveys as
proxy for actual knowledge given how TM uses that proxy in general. Troubled by
another expansion that says “whatever consumers say they are confused about is
what should be,” regardless of a variety of social interests.Asking the consumer is not always the right
solution even when you want to know what consumers think.Source of much creeping expansion.Part of it is “how many consumers”? In other
areas of TM we allow much less than 50% to be a controlling factor—why would
you set a different line here? Isn’t it troubling to let a small number set
social policy?A manipulated
misperception of the law troubles him.

A: why 50%?In part
because of what he sees when he looks at the cases.50% seems a clearer cut.Equally credible in acquiring secondary
meaning in a formerly generic term.Restatement says it’s appropriate only when the old meaning is
completely wiped out; restriction also occurs when the dominant meaning
coexists with a less dominant meaning.Do we distrust consumers/lawyers enough to discard surveys?More sanguine about that—empirical
study about how often a survey pushes the outcome of the case, Shari Diamond
& David Franklyn—shows the surveys only matter in close cases.At the extremes it doesn’t.

RT: I’d think that’s why you’d worry about surveys.It’s a close case, and surveys may be having
too much influence if you distrust the framing of surveys.I think there’s a tension between saying
“linguistics matters a lot” and then turning to litigation surveys, which we
know are carefully crafted to produce particular results and often do so, because
language matters. Surveys in general aren’t a bad form, but the reason I like
linguistic research more than litigation testimony is that, while the empirical
work carried out by linguists surely has biases/aims of its own, those aren’t
correlated with a desired litigation outcome.So research about how language generally works is more credible, as a
rule, than a litigation survey.

A: the project began because he did want to know
generalizable rules about language change. Other types of evidence of secondary
meaning—advertising—are equally troubling.(RT: Dictionaries/news uses are not in the control of the TM claimant
and are less troubling.)

Double identity: identical sign/identical goods or
services—confusion isn’t directly required, though perhaps it’s presumed.Also, for nonsimilar goods or services when
there’s confusion. These are mandatory under TM directive.Also (discretionary in EU, but mostly
implemented) use of mark w/a reputation (dilution); use of a mark without due
cause that takes unfair advantage of, or is detrimental to, the distinctive
character or the repute of the trademark—covers free riding, blurring,
tarnishment.

TM owner is entitled to protect uses that may affect any
function a TM can fulfill—quality, communication, and advertising, even when
function of indicating origin is not affected at all.Double identity rule doesn’t even contain
safeguards of antidilution law.

The use must be in the course of trade, in relation to
goods/services, for the purpose of distinguishing goods/services (TM use).Directive Art. 5(5) This doesn’t affect
protection against uses for purposes other than distinguishing goods or
services—this implies that the rest of the Directive focuses on purpose of
distinguishing goods or services. So what does that mean?

BMW/Deenik (ECJ 1999): it means signalling origin from a
particular source, origin as such. That’s the “essential” function of a TM, to
guarantee identity of origin to consumer and distinguish that product from
products w/another origin.TM use: is
public perceives as use to indicate origin, even if public knows it’s false; or
when use is liable to affect the origin function, whether or not consumers are
confused; a use liable to affect any
TM function, not just the origin function.

Use of the mark to refer to the TM owner’s own goods:
BMW/Deenik case was a garage that repaired BMWs.ECJ found TM use: Advertiser used the mark to
identify source of goods in respect of which its own services were delivered,
and that counted. But Adap Opel/Autec (ECJ 2007) found that Autec’s scale model
cars weren’t making TM use of Opel mark for motor vehicles, because Autec was
not selling motor vehicles.

That didn’t end the question, though, because in a
comparative advertising case the ECJ said using the competitor’s TM to refer to
competitor’s goods is TM use because the advertiser intends to identify its own
goods/services by comparison to others.

Use likely to affect the origin function: Arsenal case,
where people saw football marks as badge of loyalty, not origin.Sort of post-sale confusion narrative, where
people might see the goods after they were purchased.Liable to jeopardize the guarantee of origin
and interfere with the essential function of the mark.

Other functions of the mark than the essential: quality,
communication, investment, advertising—use in factor in sales promotion, or
commercial strategy, or use of mark to acquire/maintain reputation and attract
consumers.So now there aren’t very many
limits on what counts as an actionable use.

Problems: legal uncertainty; protection for functions
typically given to marks w/reputation is now granted under the main protections
for all marks, interfering w/more balanced approach. EU Commission has proposed
new directive that would cover only interfering with origin function, but
Parliament voted against it.Fear is
that regional exhaustion may be harmed.

Ramsey: what’s the solution? TM use—apparent there’s been
creep in that definition.

A: still thinking about that.Even if we accept limitation to origin
function, we still need to know what that means.

Dogan: fits with her talk—at least Europeans are
honest.What is the more balanced
approach of the protection for marks with a reputation?Language is “lack of due cause” but has that
concept been developed and due causes elaborated, or is that just a hope?

A: more like a hope.It’s for national courts to decide on specific cases.

The Use and Abuse of Certification Marks

Jeanne Fromer

Attempt to get cool kosher restaurant/nightclub.Called Jezebel to reflect “cool” biblical
rebel vibe.Want more powerful certification
with national recognition, so they talk to OU, one of the two big
national/int’l certifiers.OU says it
will only certify if (1) they change the name of the restaurant and (2) they
remove the racy artwork in the bathrooms.Thinking this important economically, they reluctantly decided to do
so.Changed name: to “The J Soho.”Went out of business months later.

Another story, not entirely dissimilar: movie ratings.
Allegations for years that the standards are applied in inconsistent ways.Henry:
Portrait of a Serial Killer sued the MPAA—didn’t think they deserved the X
rating, because R ratings went to similar movies, especially produced by
non-independent movie studios. Court thought there might have been truth to
that, though it lacked jurisdiction.(Had to release it unrated, which many theaters wouldn’t show;
marketplace death sentence.)

These are stories where certifiers with market power can do
great harm.Greater worry than w/TMs
because certifiers have control over a whole industry.The community for which it matters arguably
would care about whether OU certified Jezebel, and that’s a legitimate concern,
but the problem is that there are no articulated standards despite the promise
of neutrality.The standard is vague and
adjustable—then it’s used to keep out competitors.Everything OU says officially is that it
certifies based on food; then when this story broke it claimed that
certification also covered “ambiance.”

Ramsey: consider literature on GIs, which raises similar
concerns.Many certification marks do face competition or
possible competition if there’s abuse.

Goldman: combination of certification and market power is
the issue.Refusal to deal under
antitrust might deal with that. Are there specific antitrust considerations for
the treatment of certification marks in particular?Collective marks also provide a comparison.

Q: maybe difference between standards and scope. OU might be
reasonably required to identify what it is they certify (just food? Whether you
open on the Sabbath?) even if we can’t control their standards.Employment law/public access—maybe we’re
particularly concerned if arbitrary actions are likely to be
discriminatory.(MPAA’s ratings
definitely have gender components—a woman getting sexual pleasure gets you
NC-17 very easily.)

Sheff: Is this really different from other TM antitrust
concerns?

A: certifier wants to reach into many different spaces—the alternative
is 10,000 different certifications for “organic” and consumers have no idea
what to believe. Conventional TMs pose less of that issue.(Though if we adopt Linford’s suggestion,
maybe …)

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